Federal Government to set aside almost $1b for struggling NSW parents whose children stay in school until year 12

| 28.11,11. 08:24 AM |

Federal Government to set aside almost $1b for struggling

NSW parents whose children stay in school until year 12

ALMOST $1 billion will be set aside by the federal government to entice struggling NSW parents to keep their kids in school until year 12.

Parents of more than 204,000 NSW teenagers would qualify for an average payment of $4000.

The cash carrot aims to halt the alarming rate of dropouts among NSW students which, at 25 per cent, is one of the highest of OECD countries.

Almost half of children from low-income families, 41 per cent, will not finish Year 11 or 12, compared with 78 per cent in well-off families who stay on to complete secondary school.

Prime Minister Julia Gillard today will urge NSW parents to take the offer when it starts on January 1, in the interests of their children's education and future employment prospects.

"There's only one place for kids to be and that's in school," Ms Gillard said.

"My message is clear: Stay in school. When you leave school in a few weeks for the summer break, don't say long goodbyes. Come back next year and finish your education. It will open doors and give you a big leg-up in life."

The payments, a key election promise by Ms Gillard, will be offered to parents of 16- to 19-year-olds as an income-tested boost to the existing Family Tax Benefit A.

Students would have to stay in full-time secondary school study or a vocational equivalent such as a TAFE course.

New research suggests the cost of keeping older teenagers in school is 30-40 per cent higher than younger kids, yet the family tax payments wind down by more than 70 per cent after children turn 16 with the highest bracket dropping from $6300 to about $2000.

Ms Gillard said the extra money would help struggling families keep their kids in school, which would help them get better jobs and higher incomes in the long run.

"This will be a big help to those families under financial pressure, who are finding it hard to support older teenagers to stay at school or in training," she said.

"It's not right that at the moment families get less money when their kids turn 16. We're turning that around."

The new figures released by the Department of Families showed the number of NSW families who would qualify is almost double the number of Queensland, 40 per cent higher than Victoria and five times that of South Australia.

The maximum rate of FTB A for 16-17-year-olds in secondary school would rise by $4208 and 18-19 by $3741 per year.